The city council in Paris have launched an ambitious programme of property acquisitions by pre-emption, sparking a legal challenge by apartment owners. 

At the end of last year the mairie in Paris resolved to enter the property market in the city to buy up to 8,000 privately owned apartments.

Their ability to do so derives not only from the considerable wealth of the city, but from a right of first refusal on properties that come onto the market for sale, a power that is granted to all local councils.

Historically, this droit de préemption is used rarely, and can only be used in support of clearly defined public policy objectives.

In this case the aim is to increase the amount of social housing in the city, by bringing the acquired properties into their own housing stock.

The council claims that it is legally obliged by central government to have at least 25% of the housing in the city as social housing and suffers a financial penalty as a consequence of non-compliance.

The council have identified 257 apartments blocks, located almost entirely on the 'Right Bank' of the city (2nd, 10th, 11th, 12th, 17th, 18th, and 20th quarters), where it considers there is shortage of suitable social housing and in blocks where the rents are comparatively modest.

It is the apartment owners in these blocks who have decided to commence a legal action against the city for abuse of powers.

In theory, the owners have nothing to worry about, for the right of first refusal is not a right of compulsory purchase, as the council can only enter the fray once the property has been put on the market and a sale contract with a third party has been signed.

The council are notified of the prospective sale by the notaire, when they then have two months to decide whether or not they wish to pre-empt.

If they decide to substitute themselves for the original buyer they can only do so on terms satisfactory to the seller, normally the sale price in the original contract.

The council can make a counter-offer, but if a new price is not agreed the seller can either withdraw the property from the market or take their chances on a court of law to determine the price. The council in Paris have stated they will buy at the market price.

Nevertheless, the owners argue that the blocks are blighted by the mere fact of being identified for pre-emption by the council. They claim fewer private sector buyers will be interested, as they know the council is likely to pre-empt and that some of the block has social housing tenants in it. As a result, they consider the price of the apartments will fall.

So for the owners it is effectively compulsory purchase by another name.

The 'Collectif des 257' are to seek a legal hearing that the policy is an infringement to private property rights, as enshrined in the French Constitution.